A model industrial estate

David Lindsay speaks to Mosta Technopark Tenants Association Chairman and Managing Director of Signal Construct Malta, Henry Borg, on the Association’s work in turning an industrial estate into an important marketing tool and on how the MTTA has created a prime example for Malta’s other industrial estates to follow

The Mosta Technopark Tenants Association is a unique initiative for Malta and is serving as an example for Malta’s industrial estates on the way forward toward self-management.

The initiative, which involves absolutely no public funds as all funding is derived strictly from the private sector – more specifically from the tenants of the Mosta Technopark - also falls in line with the government’s policy of devolution of power from public to private entities.

The Mosta Technopark itself was built by the government through the Malta Development Corporation six years ago to extremely high standards to cater for the hi-tech, high value added industries.

Mosta Technopark Tenants Association Chairman Henry Borg explains the thinking at the time, "The MDC’s concept when the Technopark was conceived was to eventually levy a service charge to each tenant occupying space, which would go toward the maintenance and the running of the estate. This clause was brought into the individual letters of intent of each tenant but, for various reasons, the service charge was calculated but never levied by the MDC. The most obvious reason why the concept had never materialised was that there had to be the right person at the right time to run with the concept.

"I was approached by the MDC two years ago with the proposal of realising the idea. I went into the assessment of what was needed to be done, I liked the idea and took it upon myself kick start it."

However, a number of hurdles had to be overcome prior to establishing the association and Mr Borg concedes that there are always challenges one has to confront in order to bring things to fruition.

He explains, "The most obvious hurdle was convincing the tenants of the need to have a tenants’ association, how much it would cost them and what would be the benefits accrued from it.

"One such hurdle was establishing a probation period during which tenants could decide if they liked what was being done, while at the same time allowing me a chance to live up to what I had been saying and to see if I actually liked what I was doing.

"So I specified that we would review the situation after a year. There were, at first, certain misgivings from tenants but I am pleased to note that after the first year we held an AGM attended by nearly all the tenants and a unanimous decision was taken to reappoint me for the next two-year period.

"While I had insisted that the charge to tenants would remain at the same level as in the previous year, I was advised by the tenants themselves to increase their contributions because they could see they were getting value for money and they wanted to see more of it. That was surprising and was a big vote of confidence for both the council’s work and myself."

One of the first steps taken was to appoint financial auditors appointed by the tenants themselves so there would be a yearly audit on the MTTA’s finances.

"I insisted it be included in the statute that the auditors were chosen and appointed by the tenants themselves.

"The auditors do not only audit the financial side, but also how the association is run, how decisions are taken and what criteria has been used. To enable them to deliver a free, independent report, we gave them the opportunity to attend all council meetings in an observer status and to take notes so that by the end of the year they could have a hands-on audit of the entire operation.

"This gave the tenants the assurance of knowing where and how their money is being spent, an insight into the decisions taken on spending, while also giving them a hand in the working of their own association.

Recognising the Technopark’s value as a marketing tool, it was decided to have the estate embellished to a high standard.

Mr Borg comments, "By that logic, the tenants took control of the estate and, by default, they made it their own. Resulting from that, all those concerned wanted to make it as nice as possible since the Technopark is where we work and consequently spend a good deal of our time.

"First we saw to the basic requirements in terms of the upkeep and upgrading of the premises. After tendering we gave a contract to an agricultural society and we are already seeing the results in the welcoming presence of greenery, flowers and other embellishments.

"Although the buildings themselves are government-owned and publicly funded, the maintenance of the buildings is the responsibility of the tenants. As such, we embarked on a plan of maintenance for all the buildings, which provided for whitewashing, cleaning of the roofs and façades, street furniture etc…

"In the same vein, we devised a sensible traffic parking management system by having space allocated according to tenants’ footprints and their parking needs, while stricter discipline has also been introduced with regard to speed limits inside the Technopark.

"Another initiative undertaken was to ensure the security of the Technopark, which we identified as being needed in two respects. The first part was launched this year, which saw the introduction of wireless CCTV cameras. The wireless element was important, as there are no wires hanging anywhere in the Technopark. The cameras are all functioning 24 hours a day and are monitored seven days and nights a week. The initiative had cost a considerable sum but we managed to make a deal with the supplier and we secured a very cost-effective result.

“The second segment of security measures being implemented is the closing in of the estate so we could control who goes in and who goes out - using swipe cards for both cars and pedestrians.

"Another area, which is very important for us is the social and education aspects of all our staff. In fact, we organised nine-week long Health and Safety courses, which were well attended by shop floor employees and management alike. These courses were in line with latest EU regulations in the field.

"We have also provided a training room complete with all the training facilities, inside the Technopark, which can be used for the tenants’ own training needs. Coupled with that we have offered tenants the use of a board room, also used by the MTTA council, free of charge for delivering presentations or holding private meetings with special customers inside the Technopark but not at the actual place of work.

"We also provide industrial relations consultancy with a leading industrial consultant. Again, these are the results of our work in trying to decrease the day to day hassle of running a business so tenants can concentrate on what they know how to do best.

"Through these initiatives, and this is a common denominator for all the initiatives, the tenants do not need to spend money and human resources on the maintenance that they are duty-bound to carry out.

"Instead, the Association does it for them and that way they can focus all their resources on what they do best – making profits, increasing production and increasing employment."

The initiative has to date proved to be a success, with the MTTA receiving a tremendous amount of positive feedback from tenants and from tenants’ clients as well. Overseas clients are continually impressed with the visual impact of the Technopark, which, in effect, wins half the marketing battle before clients even enter a tenant’s establishment.

The MTTA has a number of new initiatives in the pipeline, including making the Technopark at least partially self-sufficient with respect to waste disposal, electricity and water.

Mr Borg explains, "We are well aware of the waste disposal problem Malta has and we also know that in the year 2003 Maghtab will be closed down.

"As an estate, and in conjunction with the Malta Environment and Planning Authority, we will be contracting an organised survey on what and how much waste is generated at the Technopark, for which a proper draft for a tendering procedure will be issued by next December or January of next year. Once this is done we will be implementing a system for waste separation at source that will live up to international standards.

"As tenants and businessmen, we have to control our costs and part of our costs is energy. The electricity we use is purchased at a commercial rate, which is built in to each individual tenant’s price cost formula. In addition to this is the fact that Malta has a tremendous amount of sunshine during the year. Putting two and two together, the conclusion is to have all these large roofs, which are not being otherwise used, covered with solar panels.

"Through this concept we would gather energy, pump it into the national grid for payment and when we receive payment for the energy we have generated, the funds would be distributed equally according to the solar power footprint of the individual tenants. Then tenants would be able to recalculate their cost base and use it as a leverage to get more work and to make greater profits.

"Another idea regards water. At the moment all water collected on the rooftops is channelled to a reservoir, but the water that falls on the roads is all channelled quite neatly out of the estate. Given this scenario, we are embarking on a project to connect the roads as well to the reservoir and to have the reservoir cleaned and made watertight. In so doing, we would collect all the water and reuse it on the estate for further embellishment by having seasonal flowers growing all year around.

"All our tenants are conscious that the investment we’re carrying out at the Technopark is a marketing tool for all of us to use in our business ventures abroad. In fact, by the end of this year, we are expecting a 20 per cent increase in overall employment at the park. We have printed an MTTA brochure to be used by all tenants to enhance their respective marketing endeavours. The Association has donated a number of these brochures to MDC to distribute amongst the foreign investment offices and also to all Maltese embassies."

Mr Borg praises the MDC for being instrumental in bringing investment to Malta and in creating various job opportunities – from machinery operators to managing directors and everything in between - in such a short time span since its founding in the late 1960s

He explains how the MTTA assists the work of the MDC: "It is both logical and beneficial for tenants to form associations and to manage the industrial estates in a cost effective way. What we spend per square metre with such a satisfying result, the government would have to spend a minimum of three times as much from taxes that have to be collected. Additionally, things would not always would be run as efficiently as they are through the private sector. I am not levelling criticism at the government, it is simply that the government is constrained by certain beurocratic parameters, cost structures and other considerations.

"In this way the MDC can allocate the resources they would otherwise have to spend for maintenance over here on what they know how to do best – bringing in investment from abroad.

Mr Borg, through his experience as managing Director of Signal Construct Malta and in previous posts, is a strong believer in what the average Maltese person is capable of and to what heights Malta as a country can climb.

He explains, "Even by looking at the mix of enterprises here at the Technopark, as tenants we compete in international markets and we can hold our heads up high with anyone else internationally. This is a reflection of what the Maltese people can achieve as long as there is a clear long-term vision, a clear mind and good leadership qualities. This has always been my philosophy. Given these requisites, Malta can compete with anyone.

"The validity of Malta’s workforce has been proved over and over again. Malta’s workforce is both highly skilled and flexible and the ability of the Maltese to communicate in English and sometimes in a third language sharpens the island’s competitive edge as a foreign direct investment location. As an investment location, the island certainly has a great deal to offer."